Proxy Firm: Norfolk Shareholders Should Split Ticket in Vote
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Norfolk Southern Corp.’s CEO won support from adviser Institutional Shareholder Services in the final days before a crucial shareholder vote on an activist-driven push to replace the railroad’s leadership team.
The proxy advisory firm recommended a split ticket, backing five of the board candidates from activist Ancora Holdings Group, according to a report seen by Bloomberg. ISS threw its support behind four of the company’s nominees, including CEO Alan Shaw. Among the incumbents not receiving ISS’s backing is Amy Miles, chair of Norfolk Southern.
“Although there is a clear case for change, NSC is not a broken company, and operational performance does not reflect a situation so dire as to suggest that a change in board control and an accompanying overhaul of strategy and leadership is immediately required,” according to the ISS report.
Norfolk Southern said in a statement that ISS’s recommendations in favor of the majority of its nominees “underscores the strength and effectiveness of our board and the ongoing and effective execution of the company’s strategy.”
Shaw
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Ancora has nominated seven directors in what has become a bitter proxy battle aimed at winning control of the board and reversing what the firm sees as persistent underperformance. The investor also proposed to install former UPS Inc. Chief Operating Officer Jim Barber as CEO and railroad executive Jamie Boychuk as COO.
Another proxy advisory firm, Glass Lewis, recommended shareholders vote for six dissident nominees, including Barber. The activist’s campaign has also received public support from other groups, including labor unions and at least one large customer.
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“The leading proxy advisory firms have collectively sent a clear message about the need for significant, shareholder-driven change at Norfolk Southern,” Frederick DiSanto, chairman and CEO of Ancora, and James Chadwick, president of Ancora Alternatives, said in a statement.
Investors are slated to vote before the annual general meeting May 9.
Norfolk Southern shares were down 4.1% at 1:54 p.m. in New York, giving the company a market value of about $52.3 billion.
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